ANALYSIS: Municipal Bond Defaults Signal Senior Living Distress
A January report from Municipal Market Analytics (MMA) found that in 2021, first-time municipal bond defaults for borrowers associated with senior living hit a record high. These accounted for just over half of first-time municipal bond defaults overall.
Senior living entities frequently access financing through tax-exempt municipal bonds. In these transactions a municipal entity issues bonds and then lends the proceeds to a senior living borrower. The bond documents typically provide the indenture trustee with rights against the borrower in the issuer’s loan.